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United States of America

American firms are known to be successful on a global scale, but there is plenty of scope for UK businesses to prosper in the US domestic market. We look at some of the most important things to bear in mind when it comes to exporting to the US

When the term ‘special relationship’ was first coined by Winston Churchill, it was used to emphasise the high level of military cooperation between the two countries. As a result of globalisation, cross-government cooperation and trade links, that relationship has become multi-faceted and is now also cultural and economic.

This strong relationship between the UK and the US is important to both countries, a fact that was recently underlined by Her Majesty Queen Elizabeth II making Michael Bloomberg an Honorary Knight of the Most Excellent Order of the British Empire (KBE) in October 2014. One key reason for granting this honour to the businessman, politician and philanthropist was the work he has done to engender and strengthen economic partnership between the two countries.

Advantages to the USA
The special relationship is one of the biggest advantages for UK businesses with the USA. Of course, Britons also enjoy commonality of language. You can instantly understand and be understood, meaning no costly translation services. There is also a commonality of culture: while there are of course differences between the two countries, there are enough similarities for your product or service to find a home. Another thing to bear in mind is the sheer scale of the American market. The USA has a population of 320 million, which means there is the potential for large gains.1

The US has strong transport links: when you get your products to the mainland, they can be transported to other regions efficiently. Most transport is conducted by road and rail, while air cargo within the US is usually only needed for perishables or priority shipments.

A big advantage to exporting to the US market is that physical presence isn’t always essential
for business. Telephone calls are used to arrange things that would often require face to face meetings in other countries. Americans typically depend less on personal meetings to establish trust. This works well for companies looking to export, as you can reduce the number of costly trips abroad for meetings that you need to take.

The Transatlantic Trade and Investment Partnership

The Transatlantic Trade and Investment Partnership (TTIP) aims to make trade with the US easier for European businesses by standardising regulatory guidelines with Europe and by cutting out expensive and unnecessary red tape. The initiative will have a particularly positive impact on small businesses that aspire to export to the US, but would previously have been discouraged by the high costs involved. This new initiative means that there has never been a better time to consider trading with the US. For more information on TTIP, turn to page 12.

Practical considerations
The US is comprised of 50 states, each of which are political entities in themselves, united by the Federal Government. As each state has its own laws business regulations can vary across the country. Federal laws may also differ in interpretation and implementation depending on state law, adding further complexity.

One of the biggest challenges facing UK companies doing business in the US is navigating its taxation system. If you are looking to have a physical presence in the country, or employ contractors, this can cause issues. If you are looking to export and continue filing your taxes in the UK, that obviously won’t present a problem.

Travelling within the US is easy as UK citizens are free to enter the USA on business grounds under the Visa Waiver Programme.

It may seem obvious, but it is always important to remember the sheer vastness of the USA. In Britain, we absorb a lot of American culture, but our knowledge can often be based purely on cultural and financial hubs such as New York, Washington and California. It is worth remembering that there are 50 states, and many cities, in this country. Regional variance means that, if you conduct proper research, there’s a high possibility of finding a good market for your product or service somewhere in this huge market.

Business Etiquette
It is easy to think of the USA as a cohesive culture, but that is far from the truth. Each state is influenced by the land, climate and people who populate it. Doing business in New York will be different from doing business in Arizona which will be different from doing business in North Dakota. Be aware of this, and research the area carefully to avoid alienating people or making a costly misstep.

TIME: Punctuality is taken seriously and it is standard to arrive five minutes earlier than your appointment time. If you are running more than five minutes late, be sure to call and inform your business partners of this fact.

COMMUNICATION: During meetings, participation is required by all persons present. Staying quiet might be misconstrued as having little to contribute to the project as a whole. Americans like direct communication. Their business manner can come across as blunt, but try not to be offended by ‘straight talkers’. American businesspeople ask a lot of questions, so make sure you’re well briefed. There is no shame in not understanding something, so don’t be afraid to ask for clarification if needed.

LEGAL: Americans tend to get down to business very quickly, and may place little emphasis on the building of a business relationship. The aim of negotiation is to get to the point where you have a signed contract as quickly as possible. Verbal agreements are rarely binding; there is a huge emphasis on the written word, so don’t assume a deal is done until the paperwork is wrapped up.


When choosing a place to locate your business, think about whether you want to expand on a regional basis. If you want to expand, it’s best to focus on one region so you don’t lose time and money sending people or products halfway across the country.

Even if you do not require a physical presence in the USA, it’s still easier to manage remote distribution when your markets are closer together. If you’re looking at e-commerce and can feasibly send products to all regions of the country, still research your main markets for advertising purposes. Building up relationships with local partners can also help boost online sales. How you go about this is obviously industry specific.

So even if you are just looking to deal with one state, city or town for the time being, always look at where the business could go, and make contingency plans based on this. Thinking big is the American way, after all.

If you are looking to export physical products, it is essential to do plenty of research into the geography of your market. The American landscape varies hugely, from the deserts of Nevada, New Mexico and Arizona to the colder climates of Alaska, Colorado and New Hampshire. A product that can be transported in a general truck in the UK may require refrigeration in Arizona to ensure the same quality on delivery. Also, a product that may be useful to a customer in New Hampshire may not be useful to a customer in New Mexico, so do your research carefully.

Hurricanes and earthquakes can also be a factor in certain regions. This is not an insurmountable problem, but may require special assurances from business partners or a special type of insurance.

Strong sectors
In 1990, most states had their workforce in manufacturing. As of 2013, the number of jobs in manufacturing has declined, with most states having the highest rates of employment in the healthcare and social assistance sectors.

Sageworks, a company that analyses the finances of private companies, has shown that there is considerable growth in the construction sector and industries related to it, such as home improvement. There is a strong market for industrial machinery, automobiles and parts. As far as professional services go, computer systems design and related services are at number seven in the top 20 fastest growing businesses in the US during the 12 months to April 2014. Employment services and accountancy services are also in demand.2 Strong sectors, according to the Dow Jones, include biotechnology, computer hardware, footwear, healthcare, trucking and technology.3

Research and Development is a big factor in the US. The system for implementing tax credits is complex but, unlike many countries, its research credits are available to all industries. Costs allowed under the scheme include wages, 65% of contract labour costs, and supplies and products used during the research process, but doesn’t include overheads such as capital expenditure.

It is with good reason that the USA is still referred to as a land of opportunity: even after weathering one of the toughest recessions in living memory, it offers a robust economy, an open business culture, and a consumer class that is keen to embrace new products or services. By approaching the market with an open mind, and a respect for its regional differences, a British company can enjoy considerable success.




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